Instructions For Forms W-2 And W-3 - Wage And Tax Statement And Transmittal Of Wage And Tax Statements - 2006

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2006
Department of the Treasury
Internal Revenue Service
Instructions for Forms W-2
and W-3
Wage and Tax Statement and
Transmittal of Wage and Tax Statements
Section references are to the Internal Revenue Code unless otherwise noted.
Contents
Page
provides that all amounts deferred under a nonqualified
deferred compensation (NQDC) plan for all taxable years
What’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
are currently includible in gross income unless certain
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
requirements are satisfied. See Nonqualified deferred
Need Help? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
compensation plans on page 7.
How To Get Forms and Publications . . . . . . . . . . . . . . . 2
Common Errors on Forms W-2 . . . . . . . . . . . . . . . . . . . 2
Extended due date for electronic filers. If you file your
General Instructions for Forms W-2 and W-3 . . . . . . . . 2
2006 Forms W-2 with the Social Security Administration
Special Reporting Situations for Form W-2 . . . . . . . . . . 4
(SSA) electronically, the due date is extended to
Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
April 2, 2007. For information on how to file electronically,
Specific Instructions for Form W-2 . . . . . . . . . . . . . . . . 8
see Electronic reporting on page 3.
Specific Instructions for Form W-3 . . . . . . . . . . . . . . . 14
Online filing of Forms W-2 and W-3. File Forms W-2 and
Reconciling Forms W-2, W-3, 941, 943, 944,
W-3 electronically by visiting SSA’s Employer Reporting
CT-1, and Schedule H (Form 1040) . . . . . . . . . . . . . 15
Instructions and Information website at
Form W-2 Reference Guide for Box 12 Codes . . . . . . . 16
, selecting “Electronically
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
File Your W-2s”, and logging into “Business Services Online
(BSO).” SSA’s “Create Forms W-2 Online” option allows you
What’s New
to create “fill-in” versions of Forms W-2 for filing with the
SSA and to print out copies of the forms for filing with state
New code AA, box 12. We added code AA to report
or local governments, distribution to your employees, and for
designated Roth contributions to a section 401(k) plan. For
your records. Form W-3 will be created for you based on
more information, see Designated Roth contributions on
your Forms W-2. Also see Online wage reporting on page 2.
page 5.
Substitute forms. If you are not using the official IRS form
New code BB, box 12. We added code BB to report
designated Roth contributions under a section 403(b) salary
to furnish Form W-2 to employees or to file with the SSA,
you may use an acceptable substitute form that complies
reduction agreement. For more information, see Designated
Roth contributions on page 5.
with the rules in Pub. 1141, General Rules and
Specifications for Substitute Forms W-2 and W-3.
New Form 944. We added a checkbox for Form 944,
Pub. 1141, which is revised annually, is a revenue
Employer’s Annual Federal Tax Return, to box b of Form
procedure that explains the requirements for format and
W-3. Form 944 for 2006 is a newly developed form.
content of substitute Forms W-2 and W-3. Your substitute
References to Form 944 have been included as appropriate.
forms must comply with the requirements in Pub. 1141.
Suffix entry, box e. We added a separate entry field to
Earned income credit (EIC) notice. You must notify
box e (employee’s name) on Form W-2 for employee suffix
names such as “Jr.” or “Sr.” For more information, see
employees who have no income tax withheld that they may
be able to claim an income tax refund because of the EIC.
Boxes e and f — Employee’s name and address on page 9.
You can do this by using the official IRS Form W-2 with the
Employee instructions added to Copy 2. We made the
EIC notice on the back of Copy B or a substitute Form W-2
employee instructions on the back of Copy C easier to read
with the same statement. You must give your employee
by increasing their type size and continuing the instructions
Notice 797, Possible Federal Tax Refund Due to the Earned
on the back of Copy 2.
Income Credit (EIC), or your own statement that contains
the same wording if (a) you use a substitute Form W-2 that
Reminders
does not contain the EIC notice, (b) you are not required to
Electronic payee statements. If your employees give their
furnish Form W-2, or (c) you do not furnish a timely Form
consent, you may be able to furnish Copies B, C, and 2 of
W-2 to your employee. For more information, see section 10
Forms W-2 to your employees electronically. See Pub. 15-A,
in Pub. 15 (Circular E).
Employer’s Supplemental Tax Guide, for additional
Distributions from governmental section 457(b) plans of
information.
state and local agencies. Generally, report distributions
Elimination of magnetic media as a filing method. The
after December 31, 2001 from section 457(b) plans of state
last year for filing Forms W-2 on tapes and cartridges was
and local agencies on Form 1099-R, Distributions From
tax year 2004 (forms timely filed with the SSA in 2005). The
Pensions, Annuities, Retirement or Profit-Sharing Plans,
last year for filing Forms W-2 on diskette was tax year 2005
IRAs, Insurance Contracts, etc. See Notice 2003-20 for
(forms timely filed with the SSA in 2006).
details. You can find Notice 2003-20 on page 894 of Internal
Nonqualified deferred compensation plans. Section
Revenue Bulletin 2003-19 at
409A, added by the American Jobs Creation Act of 2004,
irb03-19.pdf.
Cat. No. 25979S

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